Chronic obstructive airway diseases are a global medical burden that is expected to increase in the near future. However, the underlying mechanistic processes are poorly understood so far. Herein, we show that the endocannabinoid anandamide (AEA) induces prominent airway relaxation in vitro and in vivo. In contrast to 2-arachidonlyglycerol-induced airway relaxation, this is mediated by fatty acid amide hydrolase (FAAH)-dependent metabolites. In particular, we identify mouse and also human epithelial and airway smooth muscle cells as source of AEA-induced prostaglandin E2 production and cAMP as direct mediator of AEA-dependent airway relaxation. Mass spectrometry experiments demonstrate reduced levels of endocannabinoid-like compounds in lungs of ovalbumin-sensitized mice indicating a pathophysiological relevance of endocannabinoid signalling in obstructive airway disease. Importantly, AEA inhalation protects against airway hyper-reactivity after ovalbumin sensitization. Thus, this work highlights the AEA/FAAH axis as a critical regulator of airway tone that could provide therapeutic targets for airway relaxation.